Costco’s 2029 blueprint: pricing discipline, AI search optimization, and faster delivery

Costco is betting that its next phase of growth will not look like a break from its past. In a recent earnings follow-up story, the company’s management emphasized a familiar pricing discipline, then layered in newer priorities tied to artificial intelligence, digital product discovery, and improved delivery speed. The combined message is aimed at sustaining both sales momentum and the kind of member loyalty that has helped the warehouse club keep growing through shifting consumer conditions.

Leadership continuity is central to that framing. Costco announced that Craig Jelinek would step down as CEO effective January 1, 2024, and that Ron Vachris, then president and chief operating officer, was elected as new CEO effective the same date. Costco described the move as part of a long-standing succession plan and noted Vachris’s decades-long tenure, including early operational experience at the company. For investors, that succession matters because Costco has historically treated pricing authority and store execution as a long-run system rather than a short-run optimization problem.

On the operating side, Costco’s most recent quarterly update pointed to broad-based demand plus specific levers management says can compound over time. During the fiscal third quarter ended May 10, 2026, Costco reported net income of $2.19 billion (up 15% year over year) on net sales of $69.2 billion (up 11.6%). Comparable sales rose 9.8%, and digitally enabled comparable sales rose 21.5%. Management also highlighted continued membership strength, including growth in paid members and renewal rates.

The pricing story remains the anchor. In prepared remarks on the quarter’s conference call, CEO Ron Vachris reiterated Costco’s goal of being “first to lower prices and last to raise them,” and management referenced examples of Kirkland Signature price reductions. The company also tied value to loyalty, describing how its approach to lowering prices can reinforce shopping behavior across categories.

Alongside the old-school value proposition, Costco is pushing into a newer area it says is starting to show measurable traction: AI-driven product discovery. Management said it is leveraging AI to enhance Costco product pages so the retailer shows up in large language model search results. It characterized AI-sourced ecommerce traffic as having triple-digit growth in the quarter, while also describing that this traffic had the highest conversion rate among traffic sources, even though it remains low-volume. In plain terms, the company is trying to ensure that when members (or devices acting for members) ask AI systems about products and value, Costco information is easier to surface and more likely to lead to purchases.

Costco’s technology agenda also includes delivery and digital personalization, and it is mixing automation with logistics partnerships rather than building everything in-house immediately. Management said same-day delivery averaged under 45 minutes in the United States and that member satisfaction averaged 4.8 out of 5. It also said same-day services were rolled out in Spain and France and that the program is powered by third-party partners. On the digital side, management described site and app traffic growth of 37% and said personalized recommendations contributed nearly $5 billion in ecommerce sales for the quarter.

Finally, the company is positioning its physical footprint as part of the same flywheel. Costco said it targets 30-plus net new warehouse openings per year in the coming years, while citing the need to relocate some higher-volume stores to larger sites with more parking and room for expanded gas stations. The earnings discussion also outlined a near-term outlook of 26 net new openings for fiscal 2026, adjusted for project timing.

Still, the “where will the stock be in three years” question remains mostly a scenario exercise, not a disclosed forecast. Costco’s executives did not provide a quantified long-term ROI plan for AI initiatives, a breakdown of how AI impacts different customer segments over time, or a forward earnings model tied directly to AI search traffic. The company also did not name the specific AI companies involved, beyond saying it is working with “leading AI companies,” and it did not indicate when AI-driven volume is expected to become large enough to meaningfully change overall revenue growth. As a result, investors may have to watch whether Costco’s early AI search gains can scale, whether same-day delivery keeps expanding without eroding margins, and whether warehouse expansion targets translate into sustained comparable sales.